The brokerage anticipates robust demand growth for air travel throughout FY28. This expectation is fueled by several factors, including ongoing capacity expansions at major airports across India, which are expected to significantly increase passenger traffic.
Further, the anticipated return of the Pratt & Whitney (P&W) aircraft to IndiGo's fleet is expected to significantly enhance operational efficiency and capacity utilization. This is crucial for IndiGo to maintain its competitive edge in the market, particularly as other airlines may face constraints in aggressively expanding their capacity.
To reflect these positive factors, the brokerage has revised its earnings per share (EPS) estimates upwards for FY25, FY26, and FY27.
However, the brokerage also acknowledged certain key risks that could potentially impact the company's performance. A sharp increase in crude oil prices above $90 per barrel could significantly impact fuel costs and erode profitability. Additionally, any unforeseen delays in the return to service of the Aircraft on Ground (AOG) fleet could disrupt operations and negatively impact revenue.
InterGlobe Aviation in the low cost carrier (LCC) segment of the airline industry in India. The principal activities of the company comprises of air transportation which includes passenger and cargo services and providing related allied services including in-flight sales.
The airliner reported consolidated net loss of Rs 986.7 crore in Q2 FY25 as against net profit of Rs 188.9 crore in Q2 FY24. Revenue from operations jumped 13.55% year on year (YoY) to Rs 16,969.6 crore in Q2 September 2024.